Important news for shareholders and potential investors in Boston Pizza Royalties Income Fund (TSX:BPF.UN): The dividend payment of CA$0.12 per share will be distributed into shareholder on 31 January 2018, and the stock will begin trading ex-dividend at an earlier date, 28 December 2017. Is this future income a persuasive enough catalyst for investors to think about Boston Pizza Royalties Income Fund as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for Boston Pizza Royalties Income Fund
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Does it pay an annual yield higher than 75% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has it increased its dividend per share amount over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does Boston Pizza Royalties Income Fund fit our criteria?
Boston Pizza Royalties Income Fund has a payout ratio of 97.70%, which means that the dividend is not well-covered by its earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. BPF.UN investors will be well aware there has not been any increase in the dividend payments over the last 10 years, although the payments have at least been steady. Though this may not be a serious red flag, strong dividend stocks should always strive to increase its payout over time. In terms of its peers, Boston Pizza Royalties Income Fund has a yield of 6.27%, which is high for hospitality stocks.
What this means for you:
Are you a shareholder? If Boston Pizza Royalties Income Fund is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be valuable exploring other income stocks as alternatives to Boston Pizza Royalties Income Fund or even look at high-growth stocks to complement your steady income stocks. I recommend continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.